The young Snow Queen has fallen in love and her future looks bright, but her sister seduces the young man away and – in her rage – the Snow Queen shatters her enchanted mirror and withdraws into a frozen world.
In a busy marketplace, on a winter’s day, the handsome Kay proposes to his beloved Gerda and they become engaged. A travelling circus arrives in town – acrobats, clowns, a strongman and a ballerina each take their turn as the Ringmaster gathers a crowd. Among them is a young pickpocket who is almost caught in the act but gets away with a little help from Kay. Looking on but invisible to those around her, the Snow Queen is transfixed by Kay – his resemblance to her own lost love is strong – and she is determined to take him for herself. As the crowd gathers to watch circus acts, the Snow Queen enchants the Ringmaster to invite Kay to the stage. The Ringmaster performs a disappearing trick and everyone is amazed, however, as the crowd disperses, the pickpocket, Lexi, glimpses the Snow Queen. With Kay nowhere to be found, Gerda is left alone. Lexi tells Gerda about what she saw and the two go in search of Kay.